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Answers to the Top 6 Questions About Financing a Used Skid Steer

Answers to the Top 6 Questions About Financing a Used Skid Steer

ANSWERS TO THE TOP 6 QUESTIONS ABOUT FINANCING A USED SKID STEERWe answer a ton of questions at Smarter Finance USA about financing skid steers.

Most of the time we end up talking to someone about financing used equipment.

Generally, most shoppers have the same questions.

The questions we are asked most are:

  1. Do I have to own a business to get financing?
  2. What does it take to qualify?
  3. What are the rates?
  4. Do I have to put any money down?
  5. Will the equipment I want qualify for a loan or lease?
  6. How long does it take?

Let's talk about these things.

Skid Steer Loans For Small Businesses

We often get questions from folks about skid steer loans that they're going to use at home... maybe to plow snow on a large property or to use for building property on some new land they acquired.

There aren't any options on the market since what loan underwriters look at when making financing decisions is the revenue (money) stream likely to be generated from use of that equipment.

In order to get a loan for equipment you'll need to actually own a business. 

How to Qualify to Finance Skid Steers?


Most business owners with either reasonable credit or collateral will qualify for some sort of financing.

With that being said, any sort of financing for business is like putting together pieces of a puzzle, so issues can pop up that can make deals not work sometimes.

Like other heavy equipment, skid steers are easier to finance than many other business assets.

What are Financing Rates on a Skid Steer


Rates on financing a used skid steer run all over the board, depending on your credit, time in business, and a few other factors. We talk in-depth about financing costs for skid steers in another article, but in general, the average used skid steer we finance costs about $25,000 and is financed for 5 years.

Monthly payments on the above example, in general, look like this if you've been in business a while:

  • Good credit (685+):                        $600
  • OK credit, (650+):                            $640
  • Fair Credit (625-650):                     $680/ month
  • Poor Credit:                                     $750-$1,000/ month

For a startup, payments would be a little bit higher, ranging from $735 to $1,000 on 5-year financing.

What Down Payments Are Needed on a Skid Steer?

It depends on which program you qualify for, in general the better your credit and time in business, the lower the cost to get into your financing.

Find out what your down payment would be

With good credit and time in business, often you can start with 5% down, so $1,000 on a $20,000 machine. Depending on the program that fits best, you might be asked for one or two payments in advance. New businesses are generally asked for the first and last payment in advance.

On fair credit programs, depending on your situation you will be asked for first and last, or sometimes first payment plus a 10% security deposit.

Bad credit programs range from either a 10-20% security deposit, to first plus 10% security deposit plus collateral. Collateral can be any salable asset such as other machinery or vehicles.

Will the Equipment I'm Buying Qualify for Financing?


In general, lenders don't like to finance junk equipment, because it's likely not to work for very long and if the equipment breaks and you don't have a revenue stream from it, it makes it less likely that payments will be made.

For that reason, the older and worse the condition the equipment is in, the harder it becomes to get financing. For decent equipment that is under 10 years old from a dealer, there is almost never a problem. At 10-15 years, if the equipment is from a reputable dealer, there is usually no problem.

In most cases, even with older or high hour machines, your skid steer can still qualify.

Skid Steer Financing Calculator


Below is a calculator that will give you a "best guess" on what your skid steer payments might be.

Business financing is complex, so no calculator can be relied upon, but this should give you a general idea. 


 How Long Does it Take to Get Equipment Financing?

It depends - if you've got good credit and have been operating for over 24 months often times the deal can be done in one day. In other situations, it may take 2-7 days to make everything work - but like everything in business finance, there are always exceptions on both sides.

Smarter Finance USA can help you Finance Your Skid Steer. To learn more, please contact us or call (866) 631-9996.

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